Wall Street Grapples with AI Repricing

Investors recalibrate as AI investments raise doubts about near-term profits

Published on Feb. 18, 2026

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American investors returned to Wall Street this week after a long bank holiday weekend, only to face a sharp market decline driven by doubts about whether the billions being poured into AI will generate profits quickly enough to justify current valuations. Software companies, brokerages, trucking firms, and even commercial real estate names were swept up in a broad selloff, with the Nasdaq closing lower for five straight weeks. Nvidia, Microsoft, and Alphabet are under pressure again, while Alibaba unveiled an updated AI model. Earnings season continues, with about a quarter of S&P 500 companies still needing to report. Inflation data and a potential Supreme Court ruling on trade tariffs will also be closely watched in the week ahead.

Why it matters

The 'great AI repricing' reflects broader uncertainty about the pace of AI adoption and its impact on corporate profits. As businesses race to integrate AI, investors are trying to recalibrate their expectations and valuations. This could lead to further market volatility as the long-term implications of AI on various industries become clearer.

The details

The selloff was not driven by a recession scare or banking crisis, but rather doubts about whether the billions being invested in AI will generate profits quickly enough. Software, finance, logistics, and real estate companies were all impacted, with the Nasdaq closing lower for five straight weeks. Major tech firms like Nvidia, Microsoft, and Alphabet saw their shares decline, while Alibaba unveiled an updated AI model. Earnings season continues, with about a quarter of S&P 500 companies still to report. Inflation data and a potential Supreme Court ruling on trade tariffs will also be closely watched in the coming week.

  • Investors returned to Wall Street this week after a long bank holiday weekend.
  • The Nasdaq has now closed lower for five straight weeks.
  • About a quarter of S&P 500 companies still need to report earnings.
  • Friday's personal consumption expenditures (PCE) report, the Federal Reserve's preferred inflation gauge, will be closely watched.
  • The Supreme Court could issue a ruling on Donald Trump's trade tariffs on Friday.

The players

Nvidia

An American technology company that designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market.

Microsoft

An American multinational technology company that produces software, consumer electronics, personal computers, and related services.

Alphabet

An American multinational technology conglomerate that owns Google and several other companies.

Alibaba

A Chinese multinational technology company that specializes in e-commerce, retail, Internet, and technology.

Micron

An American multinational corporation that produces many forms of semiconductor devices, including dynamic random-access memory (DRAM), flash memory, and solid-state drives (SSDs).

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What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This 'great AI repricing' highlights the broader uncertainty around the pace of AI adoption and its impact on corporate profits. As businesses race to integrate AI, investors are trying to recalibrate their expectations and valuations, which could lead to further market volatility as the long-term implications become clearer.